What the gym model can teach us

How is one model of doing business in the fitness world extending into new areas?

When the 24/7 gyms entered the Australian market, there was a shift in the franchised fitness arena. Much of the business had been generated through so-called big box models, offering every conceivable exercise class, gym workout, plus crche, retail and maybe a heat treatment too.

The 24/7 gym movement ushered in a more utilitarian approach – no frills membership geared to convenience and value.

Now that a smaller footprint, a focus on gym equipment rather than classes, and no fancy extras diminished the need for extensive facilities, space and a big staff roster, everything seemed more affordable.

It seemed accessible and less intimidating – clients didn’t need to be gym bunnies or body builders to use the gym. 

The formula has spawned varieties on the theme with some systems adopting a no-contract, month-by-month membership renewal.

The membership model is increasingly prevalent in our lives, whether that’s on social media, accessing digital assets, our news and information sources, the wine club, Foxtel…we are happy to pay a monthly fee for a service we see as valuable.

So is it something that could work for your business?

New to our shores is the Massage Envy brand, a US based-business brought to Australia by one of the master franchisees of Anytime Fitness.

Justin McDonell is well-versed in the benefits of a membership model. It has helped the gym business grow to 450 outlets across Australia in eight years.

Now he’s applying the principles of a monthly fee in return for a service to the massage industry – and believes this will have mass appeal.

So too does Grant Jones, a former franchisee and franchisor, who four years ago established Massage Club, a business set up to bring a massage service within reach of everyday Australians.

Jones says “I used to think we were in the massage business but we’re in the membership business and we offer a massage.”

While gym membership typically allows infinite visits in a one month period, for the massage business the equation is one massage for a monthly fee. The attraction to the customer however is obvious – a reduced cost for what is often regarded as a luxury spend, and the routine of a regular wellbeing service.

The appeal to the franchisee running the operation is clear.

“When you’re in a tough economy, those 800 clients a month are so important. This means we can commit to therapists and it helps us keep them in regular work,” says Jones.

The regular income from a membership structure can be boosted with upsells and retail extras.

McDonell is confident of the Massage Envy model, drawing comparisons with the US experience which has found clinics keep growing their client base for several years, and remain a stable business of between 1500 and 2000 customers.

The American story is success writ large – 1100 locations across the country (the nearest competitor has 250).

While the gym model has been a hands-off affair, in the massage industry this is a hands-on operation – literally for the therapists, but for the franchisees too.

Running a large scale massage facility requires different levels of attention.

“You have to manage a bigger team in Massage Envy,” says McDonell.

But the great benefit for franchisees is the recurring income derived from a membership structure, and a database of clients to market to.

Where next for the membership model?